Can You Make a Car Payment With a Credit Card?
Can You Make a Car Payment With a Credit Card?
Posted on February 20, 2023
Can you make a car payment with a credit card? This was a question posed by a customer last week. It was intriguing enough that our car loan team decided to put together this blog post about it.
The short answer to the question is yes, you can make a car payment with a credit card if your lender agrees.
The more pertinent question is, should you?
Making Car Payments With a Credit Card
If you missed a payment, don’t have enough money to make the payment or something else, using a credit card may seem like a way out. While it is certainly possible to make a payment this way, you should think carefully about whether you should.
If the alternative is missing a payment, you should definitely pay with a credit card. In all other situations, we recommend considering your options first.
Your options include:
Cash advance: If your car loan company won’t accept payment by credit card, you can get a cash advance on the card from an ATM. Interest rates are high and this should be a last resort but it’s better than missing a payment.
Money transfer: Using PayPal, Western Union or MoneyGram by using your credit card as a payment source can also work. Again, not all lenders accept payments this way but it’s definitely worth checking to see if they do.
Money transfer from other sources: If you have savings, other accounts or can borrow from a friend, you can transfer money from one account to another to make sure you can make the payment. This works the same as transferring money for any reason and can save interest charges on the credit card.
Should You Use a Credit Car For a Car Payment?
We only recommend making a car loan payment in with a credit card as a last resort. If your only alternative is that or missing the payment, paying with a credit card is the way to go.
In all other circumstances, we suggest avoiding it.
Credit card interest is expensive. Not only are you paying interest on the car loan but also on the money you put on your credit card. If you can pay it off in a short time, it won’t cost all that much but if it’s there for longer, it will cost.
This is even more important if you have to use a cash advance on your credit card. These are usually charged at much higher rates than normal credit card rates so should ideally be avoided at all costs.
Using a money transfer doesn’t incur the same interest as a cash advance but not all lenders will accept payments from these providers. You’ll have to talk to your lender to see what’s possible.
They may even have other ideas that could help!
Hopefully this article helped answer your question. If you cannot use a credit card for a car payment and cannot afford to pay, click here and we'll show you what to do next.